8 April 2004, 11:45 UK gilts down early, await BoE rate decision
Gilts fell early on Thursday, tracking similar
moves in eurozone government bonds, as dealers set up for a Bank
of England interest rate decision at 1100 GMT that remains too
close to call.
Analysts are split down the middle on whether the BoE will
hike its base rate by a quarter point to 4.25 percent or leave
borrowing costs steady at 4.0 percent and instead wait until its
May meeting to raise rates.
Short sterling interest rate futures, which traded mostly
flat on Wednesday, were down across the strip, indicating bets
had risen on higher interest rates in the future.
The market is already predicting half a point of rate hikes
by the end of June.
Official data due at 0830 GMT are expected to show a
narrowing in the UK's international trade deficit to 4.6 billion
pounds in February from 5.6 billion pounds but the report is not
likely to affect the bond market.///
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